Foreign trade in Vijayanagar kingdom saw great advancements in terms of countries and items of trade. A number of foreign visitors including Arabs, Chinese and Europeans have described the activities of South Indian merchants and their trade with foreign countries. Historical evidence in the form of inscriptions provides direct evidence regarding the foreign trade conducted by foreign merchants in the Tamil country. Among the most enlightening of these inscriptions are the Tirukkalukkunram and Sadiravasaganpattinam (Sadras), both in Chingleput District, which belong to the late fourteenth and early fifteenth centuries.

Development of Foreign Trade
Foreign trade flourished from the Chola period onwards between South India and the countries of both East and West. This was in keeping with the socio-economic changes taking place in contemporary South India. In the heyday of Chola rule during the eleventh and twelfth centuries, the Manigramam and Ayyavole merchant guilds were very active. However, in the latter half of the twelfth century some change seems to have occurred; the merchants became associated with a group of landholders who were becoming powerful private landowners and were organized as Chitrameli-Periyanadu. This new tendency become stronger in Tamil Nadu during the thirteenth century, when the Periyanattars and Nattavars became very prominent as Chola rule broke down and political anarchy set in. However, the thirteenth century witnessed the growth in importance of artisans who were later organized into the Valangai and Idangai groups. There was a development now of the drafts and industries such as weaving and oil-pressing.

The thirteenth and fourteenth centuries marked a significant transition period during which the socio-economy of South India underwent important changes. At the beginning of the fifteenth century, there arose many conflicts between the two classes in Tamil Nadu society - the invading Vijayanagar administrators and big landholders on the one hand, and the artisans and cultivators on the other. However, with the establishment of Nayaka rule in the latter half of the fifteenth century, this kind of social conflict was no longer referred to in the inscriptions. European traders started their activities from the sixteenth century when Nayaka rule was established in the Tamil country, introducing a new factor into the South Indian economy. Brisk trade in cloth and aromatic goods was recorded in inscriptions during this period. Horses continued to be imported. Under Nayaka rule, therefore, a social formation generated in earlier centuries seems to have become dominant.

Among the chief consumers of foreign merchandise were the many grand temples found in the South in these districts. Apart from the temples, the royal palace, and Nayaka households located in many important places also traded in foreign goods. As the Tirukkalukkunram inscriptions suggest, many markets must have been established in these temple towns to serve the pilgrim trade. The rise of such markets must have stimulated the growth of foreign trade, and vice versa. It was seen that the foreign merchants made contributions to the repair and maintenance of the temples of the place where they resided. Decisions were made by the Uruvars (representative residents of the town) and corporate merchant bodies called Paradesigal (merchants coming from outside) and Nanadesigal (merchants of many directions), concerning their contribution. Usually, the amount payable was a set amount of money obtainable through the sale of commodities such as pearls, cloth, oil and merchandise of various countries, which were taxable by the government.

The fall of the Vijayanagar Empire and political interference by European powers during the seventeenth century together with the tremendous expansion of foreign trade, seem to have caused a change in South Indian society once again, leading towards the destruction or modification of the formation established in the sixteenth century.